Updates

Yell

June 2009

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

As one commentator put it, banks don't strangle paying guests: they don't pull plugs on businesses that can pay their bills. They have more serious problems and tolerate breaches of covenants, provided there's money to meet the interest charge. In Yell's case it refinanced some of its borrowings last September and the latest results were in line with expectations with reported sales up 8% to Â£2.4 billion (but were down 4.6% at constant exchange rates). Pretax profit was Â£466.3m and eps was 41p. EBITDA was up 10% to Â£816.1m against debts of Â£4.2bn, which provides it with 15% headroom against Yell's covenant. The facility needs refinancing in April 2011. Markets are clearly difficult and Yell saw organic revenue declines of -10% ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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